Rights of Partners

Question 1

Management Rights

Answer 1

All partners have equal rights in the management of partnership business absent an agreement to the contrary.

Question 2

Management Rights:

Decisions made by partners involving ordinary course of business vs. outside ordinary course of business

Answer 2

• Decisions involving ordinary business are decided by a majority vote of the partners.
• Decisions on matters outside the ordinary course of business require the unanimous consent of the partners

Question 3

Distribution rights

Answer 3

• partners have whatever rights are granted in the partnership agreement as to distribution of profits
• if the agreement is silent, partners share profits and losses equally

Question 4

Remuneration (aka payment for partners services)

Answer 4

partners have no right to payment for their services to the partnership except for winding up the partnership business (share in profits instead)

Question 5

Indemnification

Answer 5

a partner has a right to be indemnified by fellow partners for expenses incurred on behalf of the partnership

Question 6

contribution

Answer 6

a partner has a right to contribution from fellow partners where the partner has paid more than his share of partnership liability

Question 7

inspection

Answer 7

a partner has a right to inspect and copy the partnership books/records

Question 8

lawsuits

Answer 8

generally, a partner may sue his partnership and the partnership may sue a partner in an action in law or inequity